Vinamilk scraps share cap

Update:
May, 24/2016 - 10:49

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The SCIC currently holds a stake of more than 45 per cent in Vinamilk, and industry insiders calculate that this State stake is valued at around VNĐ55 trillion, or $2.46 billion, in the market. — File Photo

Viet Nam News HÀ NỘI — Foreign investors will be able to own the entire stake of the Việt Nam Dairy Products Joint Stock Company, or Vinamilk.

Vinamilk Chairwoman Lê Thị Băng Tâm told a shareholders’ meeting in HCM City last Saturday that the company will not cap foreign investors’ share holdings in it, and the firm will inform shareholders as soon as it completes legal procedures for this issue.

Tâm said current regulations enable unlimited foreign ownership in a domestic enterprise without being adopted by a shareholder’s meeting. The management board of the company just needs to issue a resolution to execute the matter.

She said Vinamilk had also cut several business areas where the Government stipulates conditions and restrictions for foreign investors, such as cultivation, breeding, seed processing and post-harvest services, as well as goods loading, printing, and real estate brokerage and consultancy services.

Vinamilk General Director Mai Kiều Liên said that, by enabling full foreign ownership, the company’s leaders will face a big concern: how to preserve its brand identity.

The company now has a market capitalisation value of more than US$7.5 billion, with the value of its brand name alone amounting to $7 billion. Any investors who may want to buy shares of the firm must eye its trade name, she said.

Last October, then Prime Minister Nguyễn Tấn Dũng asked the State Capital Investment Corporation (SCIC) to choose suitable times to withraw all State capital from 10 enterprises, including Vinamilk, for more business efficiency.

The SCIC currently holds a stake of more than 45 per cent in Vinamilk, and industry insiders calculate that this State stake is valued at around VNĐ55 trillion, or $2.46 billion, in the market.

Government Office Vice President Lê Mạnh Hà said the complete divestments will be part of a national long-term plan on business renovation and development.

According to the latest Vinamilk reports, the company obtained some VNĐ10.3 trillion in net revenues from the sales of goods and services in the first quarter of this year, up 18 per cent over the same period last year.

It earned roughly VNĐ2.2 trillion in after-tax profits in the first quarter, a year-on-year increase of 37 per cent.

On March 31, Vinamilk had nearly VNĐ22.9 trillion in equity. The company planned to issue more shares for existing shareholders to increase capital this year.

It is reportedly expected to issue no more than 241.9 million shares, and shareholders will receive one more share for every five shares they are holding. — VNS